Google companies

New releases mean strong Q1 earnings for game companies

PUBG: Krafton’s New State [KRAFTON]

Krafton and NCSoft reported better-than-expected first-quarter net profit, working in unfavorable market conditions and declining investor sentiment.

The two biggest game companies in Korea each launched new online games last November and saw their sales fully reflected in their performance from January to March.

Krafton, Korea’s largest game company by market capitalization, reported net profit of 245.2 billion won ($190.9 million) in the January-March period, an increase of 26% over one year.

During the same period, the company’s revenue also increased by 13.5%, reaching 523 billion won, the highest of all quarters. Operating profit jumped 37.3 percent year on year to 311.9 billion won.

Krafton rolled out PUBG: New State, the latest mobile version of its megahit PlayerUnknown’s Battlegrounds (PUBG) franchise, worldwide on November 11. It became the most downloaded game in 165 countries within four days of its release, surpassing the most downloaded. ranking games in 163 countries on the Apple iOS App Store and 63 countries on the Google Play Store.

According to the company, 95% of all revenue came from outside Korea.

“The Battlegrounds franchise has seen balanced growth across all platforms,” ​​the company said in a press release. “Mobile games have done particularly well in India […] We expect sales to more than double in India this year.

NCSoft W line [NCSOFT]

NCSoft W line [NCSOFT]

NCSoft W line [NCSOFT]

NCSoft W line [NCSOFT]

NCSoft’s network also soared and beat market consensus with the Asian launch of Lineage W on November 4.

The company’s first-quarter net was 168.3 billion won, up 38% year-on-year and above the consensus of 159.8 billion won compiled by FnGuide.

Operating profit posted 244.2 billion won, up 123% from the first quarter of 2021. Revenue was 790.3 billion won, 54% higher than at the same time last year and also a record for any quarter.

NCSoft launched its latest massively multiplayer online role-playing game (Mmorpg) Lineage W in 12 Asian countries in November, topping app store charts in eight countries during the pre-download period.

The company aims to expand its presence in the global gaming market. It will start by launching Lineage W in North American and European countries by the end of this year, the company said.

“We have more plans for new games than ever before,” the company said in a conference call Friday. “In addition to the global launch of Lineage W, we plan to release Blade & Soul 2 in Asia. TL, another new project, will also roll out by the end of this year.”

Despite the strong results, the share prices of both companies remained on a losing streak for months. Krafton shares are down more than 55% from November and NCSoft shares are down 50%.

Investor confidence has deteriorated since the beginning of this year. Blockchain and metaverse bubbles have started to burst in the local market and play-to-earn (P2E) gaming regulations show no signs of letting up.

“The time is over when stock prices rise on simple anticipation,” said an analyst who wished to remain anonymous. “It will be difficult for companies to recover their stock unless they show real results.”

Netmarble's Marvel Future Revolution [NETMARBLE]

Netmarble’s Marvel Future Revolution [NETMARBLE]

Black Desert Mobile from Pearl Abyss [PEARL ABYSS]

Black Desert Mobile from Pearl Abyss [PEARL ABYSS]

Dungeon & Fighter Mobile by Nexon [NEXON]

Dungeon & Fighter Mobile by Nexon [NEXON]

Meanwhile, other game companies that didn’t release any major titles last year struggled in the first quarter.

Netmarble lost 51.8 billion won in the first quarter of 2022, creating a deficit for the first time in 10 years. It recorded an operating loss of 11.9 billion won.

Revenue was 631.5 billion won, up 10.7% year on year, but below consensus of 728.3 billion won.

The weak earnings came from the lack of a major new title in the first quarter as well as a drop in sales of existing games, the company said in a press release.

Netmarble hasn’t had a major release since August, when it launched Marvel Future Revolution, a mobile role-playing game based on the acclaimed Marvel Cinematic Universe.

“The ongoing Covid-19 pandemic has hampered our new game release plans, which has led to subpar performance,” CEO Kwon Young-sik said in a conference call Thursday. “We expect to prepare for a jump in the second quarter with various games as well as new businesses such as metaverse and blockchain.”



Pearl Abyss, the publisher of the Black Desert Mmorpg, saw its net figure drop by 71.9% in the first three months of this year compared to the same period last year.

Net profit came in at 5.8 billion won, lower than the 9 billion won expected by the market. Operating profit slightly exceeded expectations, but still fell 60.4% compared to the first quarter of 2021. Revenues also fell 9.4%.

The net profit of Wemade, the developer and publisher of the Mir Mmorpg franchise, fell 98% year-on-year in the last quarter, reaching 400 million won. NHN, which specializes in casual mobile games, lost 4.5 billion won.

Nexon, a Korean-founded and Tokyo-listed video game company, also reported a 13% decline in net profit in the first quarter compared to 2021. It posted net profit of 40.3 billion yen (314 .1 million) for the first three months of this year.

BY YOON SO-YEON [[email protected]]